This is everything you need to know about benefiting from a Cost Seg Analysis of your property. If interested, we invite you to visit our online (FREE TO USE) Calculator to self-enroll and if you have further questions, feel free to contact Ter Scott, National Advisor.
Our Company
The Nation’s leading full-service stimulus consulting firm specializing in local, state and federal incentives. To date, GMG has assisted in securing over $500M through its custom consulting process.
Growth Management Group’s Specialized Tax Group has helped its clients find $300M in benefit through Specialized Tax Incentives. Formed in 2004 GMG’s slogan “Your Growth Is Our Business” is more than just a mantra, it’s a way of doing business. Our entire purpose is to help our clients grow, by creating economic stability and growth nationally through available programs that build business revenues thus creating jobs. With over 500 team members in 40 different states, we stay on the cutting edge of available programs which serve in a wide array of industries.
Ter Scott is a Stryde/GMG Advisor who works with clients
on a national level via screen share and is available to see business owners
within a 200-mile radius of Duluth, Minnesota.
Cost Segregation Study Overview
Engineering based cost segregation studies permit commercial real estate owners to reclassify real property for depreciation purposes and reclassify it as more rapidly depreciating personal property. This reclassification results in significant cash flow benefits in both present and future years through considerably shorter depreciable tax life and accelerated depreciation methods.
History of the Program
Cost Segregation has evolved from similar processes used in the 1970s and 1980s to complete investment tax credit studies. Investment Tax Credit (ITC) – When this credit was repealed in 1986, most assumed cost segregation studies provided no further benefit under the new tax law. However, in 1997 a landmark tax court case, Hospital Corporation of America succeed in defending the application of engineering-based cost segregation as a viable method to differentiate real and personal property under the existing law.
In 2004 the IRS released the Audit & Technique Guideline, making clear the expected process of performing a successful Cost Segregation Study. This opened the doors for many small and midsize companies to begin taking advantage of what was previously only pursued by larger companies.
Who Qualifies for Cost Segregation?
Any commercial property owner who has done the following since 1987:
- Purchased a commercial building or facility
- Constructed a new commercial building
- Renovated, remodeled, restored or expanded an existing facility
- Paid for facility leasehold improvement
What are the Benefits of a Cost Segregation Study?
According to the U.S. Treasury Department, “Cost Segregation Studies are a lucrative tax strategy that should be considered in almost every real estate purchase.”
An average Cost Segregation Study offers approximately $150,000 in additional depreciation per $1 million dollars in purchase or construction cost over the normal 39-year straight-line method.
“Cost Segregation Studies are a lucrative tax strategy that should be considered in almost every real estate purchase.” -U.S. Treasury
“…Cost Segregation Studies should be performed by qualified individuals or firms such as those employing personnel competent in design, construction, auditing, and estimating procedures relating to building construction.” -U.S. Internal Revenue Service
GMG utilizes a team of highly qualified professionals adheres to the IRS recognized Detailed Engineering Approach to perform all Cost Segregation Studies. This methodology maximizes benefits and assures that IRS guidelines are followed.
Getting Started
An initial consultation along with a feasibility report is conducted to determine the cash flow and net present value (NPV) benefits. The consultation allows our professionals to evaluate your current tax status and your future business plans along with your CPA to determine if a study would be of benefit.
The initial consultation is a simple and quick process. To schedule your consultation,
please contact Ter Scott or visit our FREE Online Cost Seg Calculator.
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